[Federal Register Volume 67, Number 45 (Thursday, March 7, 2002)]
[Notices]
[Pages 10377-10381]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-5472]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-533-810]
Stainless Steel Bar from India; Preliminary Results of
Antidumping Duty Administrative Review and Partial Rescission of
Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results and partial rescission of 2000-
2001 administrative review.
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SUMMARY: In response to requests from interested parties, the
Department of Commerce is conducting an administrative review of the
antidumping duty order on stainless steel bar from India with respect
to Viraj Group, Limited (``Viraj''). This review covers sales of
stainless steel bar to the United States during the period February 1,
2000, through January 31, 2001.
We preliminarily find that, during the period of review, Viraj has
not made sales below normal value. If these preliminary results are
adopted in our final results of this administrative review, we will
instruct the Customs Service not to assess antidumping duties.
Interested parties are invited to comment on these preliminary results.
Parties who submit arguments are also requested to submit (1) a
statement of the issue and (2) a brief summary of the argument.
EFFECTIVE DATE: March 7, 2002.
FOR FURTHER INFORMATION CONTACT: Melanie Brown or Cole Kyle, Office 1,
AD/CVD Enforcement, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington D.C. 20230; telephone (202) 482-
4987 or (202) 482-1503 respectively.
SUPPLEMENTARY INFORMATION:
Applicable Statute
Unless otherwise indicated, all citations to the statute are
references to the provisions of the Tariff Act of 1930, as amended
effective January 1, 1995 (``The Act'') by the Uruguay Round Agreements
Act (``URAA''). In addition, unless otherwise indicated, all citations
to the Department of Commerce's (``the Department'') regulations are to
19 CFR part 351 (April 2001).
Background
On February 21, 1995, the Department published in the Federal
Register (60 FR 9661) the antidumping duty order on stainless steel bar
from India. The Department notified interested parties of the
opportunity to request an administrative review of this order on
February 14, 2001 (66 FR 10269). In February 2001, the Department
received requests for review from five Indian producers of the subject
merchandise: Shaw Alloys Corp., Ltd (``Shaw''); Ferro Alloys Corp. Ltd.
(``FACOR''); Isibars Limited (``Isibars''); Viraj Group, Ltd.
(``Viraj''); and Panchmahal Steel Limited (``Panchmahal''). Concurrent
with their request for review, Isibars and Viraj also requested
revocation from the antidumping duty order. In accordance with 19 CFR
351.221(b)(1), we published a notice of initiation of this antidumping
duty administrative review on March 22, 2001 (66 FR 16037) with respect
to Shaw, FACOR, Isibars, Viraj, and Panchmahal. The period of review
(``POR'') is February 1, 2000, through January 31, 2001.
On March 30, 2001, Shaw Alloys withdrew its request for review.
Panchmahal and FACOR withdrew their requests for review on June 1 and
June 13, 2001, respectively. The above withdrawal requests were timely
and no other interested party had requested a review of these
companies. Therefore, in accordance with 19 CFR 351.213(d)(1), we are
rescinding the reviews of Shaw, FACOR, and Panchmahal.
On December 20, 2001, Isibars withdrew its request for review.
Although this withdrawal was received
[[Page 10378]]
by the Department after the regulatory deadline of June 20, 2001,
section 351.213(d)(1) of the regulations permits the Department to
extend the deadline if ``it is reasonable to do so.'' Therefore, in
accordance with section 351.213(d)(1) of the Department's regulations,
the Department extended the deadline to withdraw requests for review
and rescinded the administrative review with respect to Isibars (See
the January 3, 2002 memorandum to Richard Moreland entitled,
``Rescission of Administrative Review of Isibars, Ltd.'' which is on
file in the Department's Central Records Unit (``CRU'') in the main
Department building). Therefore, for purposes of this administrative
review, the only company reviewed is Viraj.
On July 19, 2001, the petitioners alleged that Viraj had made sales
below the cost of production. Because the petitioners' allegation
provided a reasonable basis to believe or suspect that sales in the
home market by Viraj had been made at prices below the cost of
production, the Department initiated a sales below cost investigation
of Viraj on September 7, 2001. (See Cost of Production Analysis below).
Request for Revocation
According to section 351.222(b)(2)(i) of the Department's
regulations, the Secretary may revoke an antidumping duty order in part
if one or more of the exporters or producers covered by the order have
sold the merchandise at not less than normal value for a period of at
least three consecutive years. Section 351.222(b)(4)(d)(1) allows that
the company requesting revocation need not have been reviewed during
the intervening year (i.e., ``any year between the first and final year
of the consecutive period on which revocation or termination is
conditioned'' (351.222(b)(4)(d)(2)).
Viraj was reviewed in the 1998-1999 administrative review and
received a 2.50 percent margin (See, Stainless Steel Bar From India;
Final Results of Antidumping Duty Administrative Review and New Shipper
Review and Partial Rescission of Administrative Review, 65 FR 48965
(August 10, 2000). Viraj was not reviewed in the 1999-2000
administrative review (the ``intervening year''). Viraj's request for
revocation is based on an assumption that it will be found to be not
dumping in the pending litigation of the 1998-1999 administrative
review, not on the basis of an actual finding of no dumping. Because
Viraj was found to be dumping in the 1998-1999 administrative review at
2.50 percent, Viraj has not had three consecutive years of no dumping.
Accordingly, we find that Viraj does not meet the standard for
revocation. In addition, the Department notes that Viraj failed to
certify commercial quantities pursuant to 19 CRF 351.222(e)(1)(ii) of
the Department's regulations.
Scope of Review
Imports covered by this review are shipments of stainless steel bar
(``SSB''). SSB means articles of stainless steel in straight lengths
that have been either hot-rolled, forged, turned, cold-drawn, cold-
rolled or otherwise cold-finished, or ground, having a uniform solid
cross section along their whole length in the shape of circles,
segments of circles, ovals, rectangles (including squares), triangles,
hexagons, octagons, or other convex polygons. SSB includes cold-
finished SSBs that are turned or ground in straight lengths, whether
produced from hot-rolled bar or from straightened and cut rod or wire,
and reinforcing bars that have indentations, ribs, grooves, or other
deformations produced during the rolling process.
Except as specified above, the term does not include stainless
steel semi-finished products, cut length flat-rolled products (i.e.,
cut length rolled products which if less than 4.75 mm in thickness have
a width measuring at least 10 times the thickness, or if 4.75 mm or
more in thickness having a width which exceeds 150 mm and measures at
least twice the thickness), wire (i.e., cold-formed products in coils,
of any uniform solid cross section along their whole length, which do
not conform to the definition of flat-rolled products), and angles,
shapes and sections.
The SSB subject to these reviews is currently classifiable under
subheadings 7222.11.00.05, 7222.11.00.50, 7222.19.00.05, 7222.19.00.50,
7222.20.00.05, 7222.20.00.45, 7222.20.00.75, and 7222.30.00.00 of the
Harmonized Tariff Schedule of the United States (``HTSUS''). Although
the HTSUS subheadings are provided for convenience and customs
purposes, our written description of the scope of this review is
dispositive.
Collapsing
The regulations state that we will treat two or more affiliated
producers as a single entity where those producers have production
facilities for similar or identical products that would not require
substantial retooling of either facility in order to restructure
manufacturing priorities, and we conclude that there is a significant
potential for the manipulation of price or production. In identifying a
significant potential for the manipulation of price or production, the
factors we may consider include the following: (i) The level of common
ownership; (ii) the extent to which managerial employees or board
members of one firm sit on the board of directors of an affiliated
firm; (iii) whether operations are intertwined, such as through the
sharing of sales information, involvement in production and pricing
decisions, the sharing of facilities or employees, or significant
transactions between the affiliated producers. See 19 CFR 351.401(f).
The Viraj Group Ltd. has responded to the Department's
questionnaire on behalf of the affiliated companies, Viraj Forgings,
Ltd. (``VFL''); Viraj Alloys, Ltd. (``VAL''); Viraj Impoexpo, Ltd.
(``VIL''); and Viraj USA, Inc. (``Viraj USA''). Based on the
information currently on the record, we agree with Viraj that these
companies are affiliated and should be collapsed for purposes of these
preliminary results.
The information on the record indicates that there is common
ownership among the companies in the Viraj Group Ltd. and that certain
individuals serve on the board of directors of each of the four
companies. The operations of the companies are intertwined through
close supplier relationships, as VAL supplies VIL with the input hot-
rolled bar VIL processes into bright bar and sells to the United
States. VAL, VIL, and VFL each use production facilities for similar or
identical merchandise. VAL produces hot-rolled round bars and billets
for sale in the home market. VIL also produces stainless steel billets,
flanges, forgings and wires. VFL produces stainless steel forged
flanges from billets procured from VAL. There is no evidence on the
record to indicate that substantial retooling would be required for
VAL, VIL, or VFL to restructure their manufacturing priorities.
Because the Viraj companies are under common control and ownership,
the three producing companies use similar production facilities to
produce similar products, and the operations of the companies are
intertwined, we preliminarily find the Viraj companies are affiliated
for the purposes of this administrative review and that VAL, VIL, and
VFL, should be collapsed and considered one entity pursuant to section
771(33) of the Act and section 351.401(f) of the Department's
regulations. We will consider this issue further for the final results.
Fair Value Comparisons
To determine whether sales of stainless steel bar from India to the
United States were made at less than
[[Page 10379]]
normal value, we compared export price (``EP'') or constructed export
price (``CEP'') to the normal value (``NV''), as described in the
``Export Price/Constructed Export Price'' and ``Normal Value'' sections
of this notice. In accordance with section 777A(d)(2) of the Act, we
calculated EPs and CEPs for comparison to weighted-average NVs.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products produced and sold by the respondents in the home market during
the POR that fit the description in the ``Scope of Investigation''
section of this notice to be foreign like products for purposes of
determining appropriate product comparisons to U.S. sales. We compared
U.S. sales to sales made in the home market, where appropriate. Where
there were no sales of identical merchandise in the home market made in
the ordinary course of trade to compare to U.S. sales, we compared U.S.
sales to sales of the most similar foreign like product made in the
ordinary course of trade. In making the product comparisons, we matched
foreign like products based on the physical characteristics reported by
the respondent.
Export Price/Constructed Export Price
We calculated EP in accordance with Section 772(a) of the Act for
those sales where the merchandise was sold to the first unaffiliated
purchaser in the United States prior to importation by the exporter or
producer outside the United States. We based EP on packed, CIF prices
to unaffiliated purchasers in the United States. We made deductions
from the starting price for movement expenses including, inland
freight, international freight, marine insurance, and brokerage, in
accordance with section 772(c)(2)(A) of the Act.
In accordance with Section 772(b) of the Act, we calculated CEP for
those sales to the first unaffiliated purchaser that took place after
importation into the United States. We based CEP on packed, CIF duty-
paid prices to unaffiliated purchasers in the United States.
We made deductions from the starting price for movement expenses,
including inland freight, international freight, marine insurance,
brokerage and handling, and U.S. customs duties, in accordance with
section 772(c)(2)(A) of the Act, where appropriate. We increased the EP
and CEP, where appropriate, by the amount of duty drawback in
accordance with section 772(c)(1)(B) of the Act.
Normal Value
1. Home Market Viability
In order to determine whether there is a sufficient volume of sales
in the home market to serve as a viable basis for calculating NV (i.e.,
whether the aggregate volume of home market sales of the foreign like
product is equal to or greater than five percent of the aggregate
volume of U.S. sales), we compared Viraj's volume of home market sales
of the foreign like product to the volume of U.S. sales of the subject
merchandise, in accordance with 19 CFR 404(b)(2) of the Department's
regulation. Because Viraj's aggregate volume of home market sales of
the foreign like product was greater than five percent of its aggregate
volume of U.S. sales for the subject merchandise, we determined that
the home market was viable.
2. Cost of Production Analysis
Based on our analysis of an allegation made by petitioners on July
19, 2001, we found that there were reasonable grounds to believe or
suspect that the respondent's sales of the subject merchandise in their
respective comparison markets were made at prices below their cost of
production (``COP''). Accordingly, pursuant to section 773(b) of the
Act, we initiated an investigation to determine whether Viraj made home
market sales during the POR at prices below the COP, within the meaning
of section 773(b) of the Act (See Memorandum from Team to Susan Kubach,
Director, AD/CVD Enforcement Office 1, Allegation of Sales Below the
Cost of Production for Viraj Impoexpo Ltd., dated September 7, 2001).
We conducted the COP analysis described below.
3. Calculation of COP
In accordance with section 773(b)(3) of the Act, we calculated COP
based on the sum of the Viraj's cost of materials and fabrication for
the foreign like product, plus amounts for general and administrative
expenses (G&A), and interest expenses, where appropriate. We relied on
the COP information provided by Viraj in its questionnaire responses.
4. Test of Home Market Prices
On a product-specific basis, we compared the weighted-average COPs
to home market sales of the foreign like product during the POR, as
required under section 773(b) of the Act, in order to determine whether
sales had been made at prices below the COP. The prices were exclusive
of commissions and indirect selling expenses. In determining whether to
disregard home market sales made at prices below the COP, we examined
whether such sales were made (1) within an extended period of time in
substantial quantities, and (2) at prices which did not permit the
recovery of costs within a reasonable period of time.
5. Results of the COP Test
Pursuant to section 773(b)(1) of the Act, where less than 20
percent of a respondent's sales of a given product are made at prices
below the COP, we do not disregard any below-cost sales of that product
because we determine that in such instances the below-cost sales were
not made in ``substantial quantities.'' Where 20 percent or more of a
respondent's sales of a given product are at prices less than the COP,
we disregard those sales of that product, because we determine that in
such instances the below-cost sales represent ``substantial
quantities'' within an extended period of time in accordance with
section 773(b)(1)(A) of the Act. In such cases, we also determine
whether such sales are made at prices which would not permit recovery
of all costs within a reasonable period of time, in accordance with
section 773(b)(1)(B) of the Act. We found that Viraj did not make more
than 20 percent of its sales of any product at prices less than the
COP. Therefore, all of Viraj's home market sales have been included in
the calculation of NV, in accordance with section 773(b)(1).
Level of Trade
Section 773(a)(1)(B)(i) of the Act states that, to the extent
practicable, the Department will calculate NV based on sales at the
same level of trade (``LOT'') as the EP or CEP. Sales are made at
different LOTs if they are made at different marketing stages (or their
equivalent). See 19 CFR 351.412(c)(2). Substantial differences in
selling activities are a necessary, but not sufficient, condition for
determining that there is a difference in the stages of marketing. Id.;
see also Notice of Final Determination of Sales at Less Than Fair
Value: Certain Cut-to-Length Carbon Steel Plate From South Africa, 62
FR 61731, 61732 (November 19, 1997). In order to determine whether the
comparison sales were at different stages in the marketing process than
the U.S. sales, we reviewed the distribution system in each market
(i.e., the ``chain of distribution''),\1\ including selling
[[Page 10380]]
functions,\2\ class of customer (``customer category''), and the level
of selling expenses for each type of sale.
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\1\ The marketing process in the United States and home market
begins with the producer and extends to the sale to the final user
or customer. The chain of distribution between the two may have many
or few links, and the respondents' sales occur somewhere along this
chain. In performing this evaluation, we considered Viraj's
narrative response to properly determine where in the chain of
distribution the sale occurs.
\2\ Selling functions associated with a particular chain of
distribution help us to evaluate the level(s) of trade in a
particular market. For purposes of these preliminary results, we
have organized the common selling functions into four major
categories: sales process and marketing support, freight and
delivery, inventory and warehousing, and quality assurance/warranty
services.
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Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying
levels of trade for EP and comparison market sales, (i.e., NV based on
either home market or third country prices\3\) we consider the starting
prices before any adjustments. For CEP sales, we consider only the
selling expenses reflected in the price after the deduction of expenses
and profit under section 772(d) of the Act. See Micron Technology, Inc.
v. United States, 243 F. 3d 1301, 1314-1315 (Fed. Cir. 2001).
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\3\ Where NV is based on CV, we determine the NV LOT based on
the LOT of the sales from which we derive selling expenses, G&A and
profit for CV, where possible.
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When the Department is unable to match U.S. sales to sales of the
foreign like product in the comparison market at the same LOT as the EP
or CEP, the Department may compare the U.S. sale to sales at a
different LOT in the comparison market. In comparing EP or CEP sales at
a different LOT in the comparison market, where available data make it
practicable, we make a LOT adjustment under section 773(a)(7)(A) of the
Act. Finally, for CEP sales only, if a NV LOT is more remote from the
factory than the CEP LOT and we are unable to make a level of trade
adjustment, the Department shall grant a CEP offset, as provided in
section 773(a))(7)(B) of the Act. See Notice of Final Determination of
Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate
from South Africa, 62 FR 61731 (November 19, 1997).
Viraj reported that it sells to manufacturers and distributors in
the home market and to distributors and resellers in the United States.
Viraj reported two levels of trade (based on customer category) and a
single channel of distribution in the home market. We examined the
information reported by Viraj and found that home market sales to both
customer categories were identical with respect to sales process,
freight services, warehouse/inventory maintenance, and warranty
service. Accordingly, we preliminarily find that Viraj had only one
level of trade for its home market sales.
Viraj reported a single, different, level of trade and a single
channel of distribution for its EP and CEP sales. The EP/CEP level of
trade differs from the home market only with respect to freight and
delivery. Thus, it was unnecessary to make any level-of-trade
adjustment. See section 773(a)(7)(A) of the Act.
6. Calculation of Normal Value Based on Home Market Prices
We calculated NV based on ex-factory prices to unaffiliated
customers. We made adjustments for differences in costs attributable to
differences in the physical characteristics of the merchandise in
accordance with section 773(a)(6)(C)(ii) of the Act. In addition, we
made adjustments under section 773(a)(6)(C)(iii) of the Act for
differences in circumstances of sale for imputed credit expenses. We
also made adjustments, in accordance with 19 CRF 351.410(e), for
indirect selling expenses incurred in the home market or United States
where commissions were granted on sales in one market but not in the
other (the commission offset).
Preliminary Results of Review
We preliminarily find the following weighted-average dumping
margin:
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Manufacturer/Exporter POR Weighted Average Margin
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Viraj Group, Ltd............... 2/1/00-1/31/01 0.10 (de minimis)
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Any interested party may request a hearing within 30 days of
publication of this notice. A hearing, if requested, will be held 37
days after the publication of this notice, or the first business day
thereafter. Interested parties may submit case briefs within 30 days of
the date of publication of this notice. Rebuttal briefs, which must be
limited to issues raised in the case briefs, may be filed not later
than 35 days after the date of publication of this notice. The
Department will issue the final results of this administrative review,
which will include the results of its analysis of issues raised in any
such comments, within 120 days of publication of these preliminary
results.
Upon completion of this administrative review, the Department shall
determine, and the Customs Service shall assess, antidumping duties on
all appropriate entries. The Department will issue appraisement
instructions directly to the Customs Service.
The following deposit requirements will be effective upon
publication of the final results of this administrative review for all
shipments of stainless steel bar from India entered, or withdrawn from
warehouse, for consumption on or after the publication date, as
provided for by section 751(a)(1) of the Act: (1) The cash deposit rate
for the reviewed company will be the rate established in the final
results of this review; (2) if the exporter is not a firm covered in
this review, but was covered in a previous review or the original LTFV
investigation, the cash deposit rate will continue to be the company-
specific rate published for the most recent period; (3) if the exporter
is not a firm covered in this review, a previous review, or the
original LTFV investigation, but the manufacturer is, the cash deposit
rate will be the rate established for the most recent period for the
manufacturer of the merchandise; and (4) the cash deposit rate for all
other manufacturers and/or exporters of this merchandise, shall be
12.45 percent, the ``all others'' rate established in the LTFV
investigation. (See 59 FR 66915, December 28, 1994).
These requirements, when imposed, shall remain in effect until
publication of the final results of the next administrative review.
This notice also serves as a preliminary reminder to importers of
their responsibility under 19 CFR 351.402(f) to file a certificate
regarding the reimbursement of antidumping duties prior to liquidation
of the relevant entries during this review period. Failure to comply
with this requirement could result in the Secretary's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties. In addition, this notice also
serves as a reminder to parties subject to administrative protective
orders (``APO'') of their responsibility concerning the disposition of
proprietary information disclosed under APO in accordance with 19 CFR
[[Page 10381]]
351.305, that continues to govern business proprietary information in
this segment of the proceeding. Timely written notification of the
return/destruction of APO materials or conversion to judicial
protective order is hereby requested. Failure to comply with the
regulations and the terms of an APO is a sanctionable violation.
This administrative review and notice are in accordance with
sections 751(a)(1) and 777(i)(1) of the Act.
February 28, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 02-5472 Filed 3-6-02; 8:45 am]
BILLING CODE 3510-DS-S